Proposals to tackle the “vice-like grip” held by the likes of Amazon on digital markets have been welcomed by supplier groups as well as lawyers eyeing legal action against the company.
The government this week published draft legislation under a Digital Markets, Competition and Consumers Bill, which aims to ensure fair competition in digital markets dominated by a handful of major players.
The legislation is widely expected to cover companies such as Amazon, Apple, Google and Meta, deemed to be of “strategic market status”. It will give the courts and the CMA’s Digital Markets Unit the power to impose penalties of up to 10% of global turnover for companies found guilty of breaching consumer law.
The level of maximum fine dwarfs that of the Groceries Code Adjudicator, which can impose a fine of up to 1% of Amazon’s £1bn-plus turnover if it is found to have breached GSCOP.
Business and trade minister Kevin Hollinrake said the legislation, which has yet to go through parliament, would give the CMA “new powers to tackle the excessive dominance that a small number of tech companies have held over consumers and businesses in the UK”.
He added: “This market dominance has stifled innovation and growth across the economy.”
The move was welcomed by the Responsible Online Commerce Coalition, a coalition of lawyers that The Grocer revealed last month was gearing up for possible class action cases in the UK, the US and Europe.
It has listed a raft of areas of concern over the actions of Amazon, including sellers lacking equal access to the online platform, a fair dispute resolution process, the freedom to set their own prices and offer discounts, as well as equal access to data.
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